According to a report by Yle, a yet to be published study by the University of Oulu has revealed that every third CEO of a publicly listed company in Finland and Sweden has a criminal conviction.
The study, which was led by Juha-Pekka Kallunki, professor of accounting at the University of Oulu, examined records and information on all Finnish limited companies with a turnover of over 100,000 euros from 2000–2019.
The research team has reportedly been studying the impact of business leaders’ backgrounds for over ten years. The first study, which was published in 2013, found that 33.1 per cent of the CEOs of publicly listed companies in Sweden had a criminal record.
The latest research suggests that the trend of criminal records among executives has continued in Sweden as well as Finland. The alleged crimes committed by Finnish CEOs include repeated instances of drunk driving, fleeing the scene of an accident and various violent crimes, with some even serving time in prison.
The study found that in addition to CEOs, the members of a company’s board of directors and other high-level executives such as auditors were frequently guilty of payment defaults and other crimes.
According to Kallunki, the corporate culture prevalent in Finland discourages companies from running background checks when hiring employees for executive positions.
The research also indicates that criminal records have an adverse effect on the success of the company. Hiring executives with criminal convictions raises the risk of bankruptcy as well as insider trading and other illegal activities. Additionally, it has a negative impact on the company’s reputation and perceived credibility, ultimately resulting in decreased profits.